Instant coffee exports, domestic sales up on increased home consumption: CCL Products (India)

India’s instant coffee export is one of the few bright spots in the economic wreckage caused by the Covid pandemic, experiencing a huge jump so far in 2021. Instant coffee exports vaulted by about 124% to 12,078 tonnes from January 1 to June 11 from a year ago, per the latest Coffee Board data. That makes it the star performer among the coffee exported from the country. India exports over 70% of its coffee production.

Hyderabad-based CCL Products (India) Ltd is the biggest instant coffee manufacturer and exporter from India. With two production units in Andhra Pradesh and one each in Vietnam and Switzerland, CCL Products accounts for over 50% of the instant coffee exported from the country. It has a total production capacity of 24,000 tonnes of spray-dried and 11,000 tonnes of freeze-dried coffee and currently exports to 90 countries, moneycontrol reported.

With consolidated revenue at Rs 1246 crore and profit at Rs 182 crore in FY21 showing 9% growth over the previous year, the company is anticipating a growth of 10 to 15 % in both parameters in the current year.

CCL Products MD Challa Srishant spoke about the reasons for the increase in export, COVID-19 impact, consumption trends and rise in coffee prices to moneycontrol. “People who are used to drinking coffee every day don’t have the option of going out because of Covid-19. Drinking roasted and ground coffee at home is difficult and so the easier and faster solution is instant coffee.”

He said that within India, the company could not operate to the optimum utilisation levels in view of lockdowns/imposition of containment zones for almost three months. Due to extended lockdowns in other countries like Russia, the company was forced to accept dispatch postponements in FY 2020-21. However, thanks to Vietnam operations being normal, the company was able to achieve a CCL Group consolidated growth of 10% in FY 2020-21. In most countries, coffee comes under the essential category and every one has special permission to keep the plant running.

“A substantial part of our sales will go into the branded SKUs sold through various supermarkets and other supply chain system—hence are not affected by the reduction in institutional sales. Any reduction in institutional sales is compensated by the increase in retail products,” Srishant said.

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